July 26, 2021 – July 30, 2021

Market Performance For The Week

Source: YCharts
Disclaimer: Past performance is no guarantee of future performance

The Good News

Earnings of both large and small companies are coming in above expectations.

GDP price index reaches a 40-year high.

The GDP price index is up 6% at an annual pace, the most since the 1980s, as @AnsteyAsia notes. pic.twitter.com/VejrZsOtSb

— Lisa Abramowicz (@lisaabramowicz1) July 29, 2021

The Bad News

But 2Q GDP came in below expectations. 

Quite the miss (by economists) for 2Q GDP, which expanded at +6.5% (q/q ann.) vs. +8.5% est. & +6.4% in prior quarter … level has passed pre-pandemic peak … more details shortly pic.twitter.com/ZcujjXz9J2

— Liz Ann Sonders (@LizAnnSonders) July 29, 2021

The 6.5% #GDP growth number was exceptionally weak. Earlier this year, I had debates with several high-profile #economists who were expecting double-digit growth. In April, the #AtlantaFed expected 13.5%. #Debt funded #stimulus does not create real #growth. pic.twitter.com/MCZ0P1V14S

— Lance Roberts (@LanceRoberts) July 30, 2021

As are a lot of announcements these days. There are now more economic announcements missing expectations than beating. 

And inflation numbers came in hot, again.

The US core PCE inflation jumped 6.1% in the second quarter, the biggest quarterly increase since the early 1980s. ???????????? pic.twitter.com/VY3kb4DNAF

— Win Smart, CFA (@WinfieldSmart) July 30, 2021

The State Of The Market

The market has been on a rather good run. 

The fastest doubling on record!

We are close to a doubling of the S&P 500 Index since the low in March last year. If realized, it would be, by far, the fastest doubling of US #equities on record.
The Daily Insight: https://t.co/KDbYQylBOv

chart @RyanDetrick pic.twitter.com/kJ5oMkc2yB

— jeroen blokland (@jsblokland) August 2, 2021

S&P 500 up more than 17% YTD, more than double the average annual gain since 1957, and a percentage point higher than the average of all positive years – @sherifa_issifu pic.twitter.com/6jn6Ee3zYV

— Sam Ro ???? (@SamRo) July 30, 2021

But seasonal trends are not in our favor. 

Though spending in the aggregate remains strong and above trend. 

And incomes remain above trend. But they are coming off of stimulus induced highs, which may weigh on spending going forward.

Upside surprise for June personal income, +0.1% vs. -0.3% est., though prior month revised down from -2% to -2.2% … personal spending +1% vs. +0.7% est. & -0.1% in prior month (rev down from 0%) … real personal spending +0.5% vs. +0.3% est. & -0.6% prior (rev down from -0.4%) pic.twitter.com/b39BKV7F4L

— Liz Ann Sonders (@LizAnnSonders) July 30, 2021

Especially if US consumers have already spent most of their savings.

Personal savings rate dipped to 9.4% in June, down from 10.3% in May … now at lowest since February 2020 pic.twitter.com/uCWFENMhDM

— Liz Ann Sonders (@LizAnnSonders) August 2, 2021

Maybe Amazon is giving us a heads-up, or maybe consumers are just shifting their spending to other segments of the economy.

Source: ZeroHedge

But many will probably buy the dip, if there ever is one. 

Charts Of The Week

This along with the S&P 500 divided by the Fed Balance Sheet are my favorite charts.

Interest rates since 3000BC pic.twitter.com/PNZhBOkNvB

— Mike Zaccardi, CFA, CMT (@MikeZaccardi) July 30, 2021

IG corporate yield in real terms lowest since ‘80 – ⁦@SoberLook⁩ ⁦@ISABELNET_SA⁩ ⁦@BofAML⁩ pic.twitter.com/zHLRk09LjB

— Rob Hager (@Rob_Hager) August 3, 2021

From @McKinsey pic.twitter.com/GtzHWMLcPf

— Mohamed A. El-Erian (@elerianm) August 1, 2021

Mapped: Visualizing the True Size of Africa ????https://t.co/BSwfaChT0X pic.twitter.com/lvxdTysxq0

— Visual Capitalist (@VisualCap) August 2, 2021

Wait, who has the reserve currency again? ???? pic.twitter.com/ZSXnPE9c9z

— Win Smart, CFA (@WinfieldSmart) July 18, 2021

Market cap of stocks with price/sales ratio > 20x ???? Draw your own conclusions. Ht @KailashConcepts pic.twitter.com/IZGHQoI5FP

— M. A. Arouet (@MichaelaArouet) August 2, 2021

Poverty in the U.S this year is projected to fall by 45% from 2018 — nearly three times the previous three-year record, according to historical estimates by researchers at Columbia University. https://t.co/hGyb3LNAtB pic.twitter.com/jRAjUuv3vX

— The New York Times (@nytimes) July 30, 2021

Story Of The Week

The pandemic caused a housing boom seemingly everywhere, not just the US: https://www.ft.com/content/491a245d-4af7-4cad-b860-6ba51b86b45f

Disclosure

Clear Rock Advisors, LLC is registered with the SEC as a registered investment advisor with offices in Texas. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Clear Rock Advisors, LLC) or any investment-related or financial planning consulting services will be profitable, equal any corresponding indicated historical performance level(s), or prove successful. It remains the client’s responsibility to advise Clear Rock Advisors, LLC, in writing, if there are any changes in the client’s personal/financial situation or investment objectives for the purpose of reviewing, evaluating or revising Clear Rock Advisors, LLC’s  previous recommendations and/or services, or if the client would like to impose, add to, or modify any reasonable restrictions to Clear Rock Advisors, LLC’s services. A copy of Clear Rock Advisors, LLC’s current written disclosure statement discussing its advisory services and fees are available upon request.